Florida Senate Bill 264 Limits Real Estate Sales Involving Foreign Principals

A new law effective in Florida as of July 1, 2023, makes it illegal for individuals or entities of several foreign countries to own agricultural land or land within 10 miles of critical infrastructure or military installations in Florida.

There are exemptions and caveats, but essentially, Senate Bill 264: Interests of Foreign Countries, which Gov. Ron DeSantis signed into law, prohibits real estate sales to people or companies from foreign countries of concern, which it lists as China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria. The law specifically states that its prohibitions apply to the Chinese government and those connected with it.

The Governor’s office says the bill is meant to counteract the malign influence of the Chinese Communist Party in the state of Florida.

The ACLU of Florida and other civil rights organizations have joined several Chinese residents in Florida and a real estate brokerage catering predominantly to Chinese clientele in a federal lawsuit asking for the law to be declared unconstitutional. U.S. District Judge Allen Winsor heard the complaint on July 18 but has yet to issue a ruling.

The new law, which imposes forfeiture of property and criminal penalties for violations, makes it more important than ever to consult a Florida commercial and residential real estate lawyer of Chiumento Law, PLLC, if you are involved in a transaction in Flagler or Volusia counties.

Three Primary Requirements of Senate Bill 264

Three sections of the new land sales law explain what types of transactions it impacts:

Section 5: Purchase of Agricultural Land by Foreign Principals. The law makes it illegal for a foreign principal to directly or indirectly own, have a controlling interest in, or acquire agricultural land in Florida. Those who already own or have a controlling interest in agricultural land must register with the state.

To comply with the law, anyone buying agricultural land must provide an affidavit attesting to the fact that they are not a foreign principal.

A foreign principal is defined as:

• The government or any official of the government of a foreign country of concern
• A political party or member of a political party in a foreign country of concern
• A partnership, association, corporation, organization, or other combination of persons in or organized under the laws of a foreign country of concern
• Anyone living in a foreign country of concern who is not a citizen or lawful permanent resident of the United States.

The legal definition of agricultural land under the new law is as stated in existing Florida statutes.

Section 6: Purchase of Real Property On or Around Military Installations and Critical Infrastructure. The law makes it illegal for a foreign principal to own, have a controlling interest in, or acquire land within a 10-mile radius of military installations or critical infrastructure facilities. Those who already own or have a controlling interest in such property must register with the state.

Critical infrastructure facilities include power plants, refineries, chemical plants, water and wastewater treatment plants, airports, seaports, and spaceports.

Anyone buying land within a 10-mile radius of military installations or critical infrastructure facilities must provide an affidavit attesting to the fact that they are not a foreign principal.

Section 7: Purchase or acquisition of real property by the People’s Republic of China prohibited. This portion of the statute makes it illegal to own, have a controlling interest in, or acquire land in Florida by:

• The People’s Republic of China, the Chinese Communist Party, or any official or member of the government or party
• Any other political party or member of a political party in China
• A partnership, association, corporation, organization, or other combination of persons in or organized under the laws of China
• Anyone living in China who is not a citizen or lawful permanent resident of the United States.

Those who already own or have controlling interest in property in Florida must register with the state.

Anyone buying land must provide an affidavit attesting to the fact that they are not a member of the Chinese government or a Chinese political party, a partnership, association, or corporation.

However, the law allows an individual otherwise not allowed because they are from China to buy a single parcel of land of up to 2 acres if it is not on or within 5 miles of any military installation and they live here on a proper visa.

The Potential Impact of Florida’s New Real Estate Sales Prohibitions

If you are engaged in real estate transactions affected by Senate Bill 264, the most significant impact of violating the new law is a potential civil action to require the forfeiture of the real property purchased by a prohibited owner. When a forfeited property is sold, proceeds are to be used first to repay lienholders, then to satisfy fines and judgments, and to reimburse any costs associated with the confiscation and sale.

Violations may be charged individually as a third-degree felony, which is punishable by up to 5 years in prison and a fine of up to $5,000 or five years of probation.

At the very least, the new law may require you to file an affidavit attesting to the legality of your ownership, along with other paperwork already required when closing a sale.

The Importance of Real Estate Lawyers

Florida is one of the few states that does not require a buyer or seller to work with a real estate attorney to close a real estate transaction. This leaves a lot of information for the average buyer or seller to understand on their own.

An experienced Florida real estate lawyer can keep you from making mistakes or omissions that violate the law when you buy or sell real property.

Get Help from Our Palm Coast Real Estate Lawyers

Closing a real estate transaction is a complex procedure. Licensed real estate lawyers are obligated to protect the interests of their clients in real estate transactions. When buying or selling real estate in Palm Coast or Ormond Beach, Florida, contact an experienced Palm Coast real estate lawyer from Chiumento Law, PLLC. Phone (386) 753-3245 or reach out online to set up an initial consultation about a pending real estate transaction.